Friday, June 22, 2018
Business

Cuban charter said price war driving it out of Tampa International Airport

TAMPA — Another airfare price war is roiling the volatile Cuban travel market at Tampa International Airport.

Island Travel & Tours Ltd., which has been flying to the island nation three times a week, said that it will halt its Tampa-to-Cuba air service with its final flight on Wednesday and for the foreseeable future.

TIA has eight flights a week both arriving and departing from Cuba. Island Travel & Tours' pullout would leave just five flights a week.

Island owner Bill Hauf, who has accused competitors of undercutting him in the past, blamed his company's most recent woes on newcomer Cuba Travel Services Inc.

The California company, also known as CTS, entered the Tampa market in December and charters flights to Cuba on Thursdays and Sundays.

"They decided to destroy the market," Hauf said.

CTS general manager Michael Zuccato denied that allegation.

"We're not undercutting the market," he said. "But I think we're offering flights at a price that's fair, and fair to travelers."

ABC Charters Inc. is the third company flying out of Tampa.

"I have not felt at this point that it has affected me," said ABC president Tessie Aral. "Whatever their strategy is, it has not affected my business."

CTS and ABC Charters said they have no plans to add more Tampa-to-Cuba flights. But charters typically add flights in the summer when more Cuban-Americans fly because their children are out of school.

Island Travel & Tours is the only charter based in Tampa. Hauf said his company will continue to arrange Cuban trips and book tickets on other flights, but he doesn't know how many of his dozen Tampa employees he'll have to lay off.

Challenges have never been far from Tampa's young but successful Cuban travel market, which has seen strong passenger numbers amid brutal competition.

Cuban flights have been a success for TIA since 2011, when it joined the select list of U.S. airports permitted to fly there.

From October to April, TIA said the number of people using the airport to travel to Cuba jumped 45 percent from the same time period the year before, to 34,358 passengers.

But success for those in the Cuban travel business has been harder to come by.

Cuba is under U.S. embargo. Charter companies must have permission from the U.S. and Cuban governments to land planes. And although Cuban-Americans can visit family, other U.S. citizens need an official reason and permission from their government to travel to Cuba. Tourism is not permitted.

Hauf said he used to charge $449 for a round-trip ticket and barely broke even. He said CTS entered the market charging $379. The current price for Island's last flight Wednesday is $399. The current price for CTS's flight on Thursday is $389.

Hauf also accused CTS of undercutting baggage fees, which can be more lucrative. Cuban-Americans often travel with goods such as TVs for relatives.

Hauf accused CTS of operating at a loss to ruin Island's business.

Zuccato's response: "Aviation is one of those things that, on one flight you profit and on the next you may lose money. You have to look at operating on a quarterly and yearly basis. We're happy with the production we have in Tampa."

A price war benefits customers, but Hauf said one competitor could drive the others out and then raise ticket prices.

There's nothing the airport can do about it. TIA has no control over what companies fly to Cuba or how much they charge.

If the market demands new flights, airport officials said, someone will provide them.

"Being a relatively new route for the Tampa Bay area, the market is still adjusting to what is the right number of flights to offer," airport spokeswoman Emily Nipps said. "It's a seasonal market, but if you look at the raw market the demand is obviously there to support several flights per week."

Jamal Thalji can be reached at [email protected]

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